AGO Opinion 84193

February 17, 1984
Senator Rex Haberman
Member of the Legislature
State Capitol Building
Lincoln, Nebraska 68509

Dear Senator Haberman:

In your letter of December 8, 1983, you indicated a desire to introduce legislation to repeal or amend sections of LB 302 (1983} dealing with the tax imposed on users of "special fuels" who have their own storage facilities for such fuels. You request our opinion as to the constitutionality of the classification in the existing legislation, the constitutionality of the proposed classification, and the necessity of the proposed change in order to withstand a constitutional challenge to the validity of such legislation.

Our response must necessarily begin, however, with our general confidence in the legislature's ability under the Constitution to specially tax users of special fuels (generally, diesel fuel and propane). From our reading of the legislative history of LB 302, it is apparent that the section imposing the tax/permit fee was intended to prevent a special fuels user who had his own storage facilities from escaping tax liability which he would have paid to a retailer had he bought the fuel from theft. At the retail level, other hi~1~yusersare taxed according to the amount of fuel they use, thus, by the amount of their usage of the highways. Article III, Section 18 of the Nebraska Constitution, as interpreted by the Nebraska Supreme Court requires that any such classification be based upon "real and substantial differences" and that a rational basis for the classification is afforded by that difference.
State v. Emmunds, 211 Neb. 380, 318 N.W.2d 859 (1982). Here, since fuel users were escaping tax liability by using their own storage facilities, it seems rational that they be subject to special permit fee.

Thse are of the opinion that the proposed change in classification would preclude any constitutional challenge to the tax imposed on users of "special fuels."

Very truly yours,

Attorney General